On Tuesday March 16th Genesys, a leader in intelligent contact center (ICC), announced its intent to acquire Bold360, a leading player in the rapidly growing conversational AI market, from LogMeIn for an undisclosed sum. This blog reviews the deal and the rationale behind it.
The Growth of Digital Labor Means More Virtual Agents
Part of the reason for this deal is that people will be dealing with more virtual agents in the future. The sheer demand for what Aragon calls digital labor means that contact center providers need to meet that demand. This deal follows Five9’s to add more conversational AI when it acquired Inference Solutions in October 2020.
Why did Genesys Buy Bold360?
With the demand for virtual agents comes the need to acquire platforms that can offer them. Given this, the deal makes sense. This acquisition comes on the heels of the launch of Genesys Digital Business unit in December led by Barry O’Sullivan. O’Sullivan came to Genesys through the acquisition of his AI start-up company Altocloud in 2018.
This new business unit is focused on enabling companies to keep pace with consumers’ evolving preferences for digital engagement across the customer journey, whether using web chat for an inquiry, scheduling an appointment via text or receiving care from a chatbot. Genesis Digital will become the new home for Bold360 once the acquisition is complete later this year.
The new Bold360 acquisition will push forward the conversational AI.
LogMeIn Bold360 Background
Bold360 has an impressive customer list including Royal Bank of Scotland, Fannie Mae, Vodafone, Intuit Mint, and The North Face. By leveraging Bold360’s rich conversational AI and dynamic knowledge base capabilities, Genesys will strengthen its existing AI capabilities and be able to provide its customers with experiences that are fluid, context-based and personalized. This aligns well with the Genesys vision of Experience as a Service, reimagining how empathy can inextricably link marketing, sales, and service experiences for customers.
The History of Bold360
LogMeIn acquired Bold360 in 2012 for $16.5 million, and then enhanced its AI chatbot and virtual agent capabilities through the acquisition of AI Chatbot startup Nanorep for $50M in 2017. LogMeIn was then acquired by private equity firms Franciscan Partners and Evergreen Coast Capital for 4.3 billion in 2020 in an all-cash transaction.
Private Equity
Private equity ownership is a double-edged sword. It can provide companies with the capital foundation to focus on long term growth over short term profits, however there’s also the financial strategy of private equity to carve out portions of companies that can stand on their own and sold to provide a return on their investment.
LogMeIn has assembled a very diverse portfolio of fourteen independent products including the original LogMeIn products, the GoTo suite of products, LastPass, Bold360, Grasshopper, and OpenVoice. Given this diverse portfolio, I suspect the acquisition of Bold360 is just the first LogMeIn product to be positioned and sold to provide a return for the private equity investors.
That said, it was just last April that LogMeIn announced its own contact center offering, GoToConnect Contact Center. Aragon feels that a majority of ICC providers will need to invest in conversational AI capabilities to fulfill the need for virtual agents over the next ten years.
Doubling Down
Genesys created its Digital and AI R&D Center in Galway, Ireland built around the team from Altocloud. As recently as January, Genesys announced the creation of 100 new software roles at this R&D center. The acquisition of Bold360 comes with around 100 technology employees, so time will tell whether the focus was changed from hiring to acquiring, or whether Genesys Digital is literally doubling down on AI development.
Bottom Line
The acquisition of Bold360 seems completely aligned with the goals of the new Genesys Digital business unit. With the technology in Bold360, they will be armed with some sophisticated tools to deliver natural language chat and voice capabilities for their growing customer base and will get them that much closer to delivering on their vision of Experience as a Service.